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Follow us on TwitterSmart Outsourcing: Lowering Costs, The Right Way
Below is an interesting interview from Dan Berg, CTO of Sun Services. He goes in to detail on how Sun is lowering IT costs by outsourcing and by providing managed solutions to their customers. It covers a lot of what Robson Communications does to help it’s clients manage their outsourced solutions, and some of the reasons why other businesses are looking as outsourcing as a necessity these days. It’s all about lowering your operating costs with Robson Communications Inc.
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Martin Robson
Robson Communications Inc.
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Smart Outsourcing: More than just lower costs.
 Dan Berg |
Cost reduction is only one variable in the outsourcing equation. Customers also need to focus on process, flexibility, collaboration, and decision-making control to realize the potential of IT as a service. Sun Services CTO Dan Berg, vice president and CTO of Sun Services, explains.
Inner Circle (IC): Naturally, there is a lot of talk about outsourcing these days. As CTO of Sun Services, can you describe Sun’s take on outsourcing?
Dan Berg: Many companies are outsourcing simply to get a cost benefit by using lower cost personnel to perform functions that had previously been done within the organization. As far as how effective they’ve been, some companies are saying that outsourcing has been quite successful, while others say that it didn’t work like they wanted it to. In order to be successful, enterprises need to focus on the process that they’re trying to outsource. They cannot simply take a section of work and give it to another company. That doesn’t work out very well.
The way to do it is looking at the existing process and its related outcomes — and then asking the outsourcing partner how they would achieve the same or better outcome by leveraging their own established processes and best practices. The combination of process definition and process execution is crucial.
IC: How does Sun use outsourcing?
Berg: We seek to outsource processes that are not part of our core business. There are a couple of different outsourcing projects going on at Sun. For example, we’ve engaged companies to handle some of our HR functions, as well as IT development and maintenance.
IC: How does Sun work with its customers when it comes to outsourcing?
Berg: From a services perspective, what Sun is really focused on is delivering customer satisfaction by designing, deploying, and managing IT infrastructure — and, of course, doing all of that in a way where customers realize cost advantages. In fact, the benefit of working with Sun versus some of our competitors is that we bring flexibility to outsourcing.
At Sun Services, we don’t just take a data center — or whatever a customer is looking to outsource — and ship it off-site. Sun can actually help customers segment infrastructure and allow them to pick and choose the parts that make sense to outsource. Plus, Sun works with a number of partners to help facilitate that approach, from hosting to managed services. For example, we can look at a service or application and determine where our best practices and processes should be applied. At the same time, we allow the customer to retain control of the decision-making and other core functions.
IC: Can you give an example of how that might work?
Berg: A customer may choose to have its mail and messaging services managed by Sun. We have the expertise, 24/7 monitoring and management capability, and the best practices to deliver a cost-effective solution. But the company still wants to make the decisions about how it wants mail and messaging managed, as well as what sort of policies govern it. The Sun model grants that flexibility and allows customers to make those decisions.
IC: So, Sun encourages flexibility while allowing customers to retain decision-making authority?
Berg: Absolutely. What we’ve seen is that when outsourcing involves a “pack up the truck and move it off to another organization” approach, customers lose the connection to what they are outsourcing. They lose the advantage of looking for efficiencies and cost benefits, which is why they got into outsourcing in the first place. Keeping the customer engaged and letting them determine the right degree of granularity — whether that is at the service, application, or data center level — is very important.
IC: Do you have any general advice for IT managers or directors that are looking at outsourcing part of their environment?
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Berg: Be wary of anyone who comes in and says: “Don’t worry about a thing — we’ll take care of it.” We’ve found success for both customers and for Sun comes when we sit down and figure out the details together. What makes sense to move and when? How is it going to be managed and monitored? Where are the efficiencies that are going to be extracted? Where does automation make sense? We fundamentally believe in delivering IT as a service. If you think about the mail and messaging example as a service provided to employees, then the goal is to get to a level where it doesn’t matter where that service is run or how it’s run. All that matters is that a quality service is being provided and the value is being realized. That is what delivering IT as a service is all about.
IC: When does offshoring make sense as part of an outsourcing project?
Berg: When people say offshoring, I always ask: “If you want to go offshore, what do you consider onshore?” Everything is distributed and accessible on a network. So, what do people mean when they say “offshore?” When you begin to examine that question, most people mean labor arbitrage — lower labor rates. But the biggest advantage of driving things via the network — which is also Sun’s significant value-add — is that the services and applications can be provisioned, managed, and operated from anywhere.
With Sun, the perceived labor arbitrage becomes less of a “let’s move this to a particular location” decision and more of a discussion about the processes and policies that can be managed by someone else. When our customers leverage the network and our best practices they get all the benefit of labor arbitrage without having to constantly move people around.
IC: What are Sun’s advantages vis-à-vis the network? What kind of technologies is Sun working with?
Berg: Sun is working with technologies that drive automation and process efficiency within an IT operations environment. Sun looks at the routines and processes that our customers are using within their data centers, as well as what we use in our data centers, to establish best practices. Then we try to inject technology everywhere we possibly can. We don’t do that because we think it’s cool. Rather, we believe that when it comes down to people versus technology, in the end, technology wins — both from an efficiency standpoint and cost perspective. Therefore, if we can find ways to automate processes, the customer wins. We’re not looking to remove all human interaction, of course, but rather to bring more consistency to processes that exist and where possible leverage the network to extract efficiencies.
IC: And what types of technologies are involved in automation?
Berg: We are leveraging traditional networking technology in some unique ways. Primarily, we are focused on the capability to monitor, manage, operate, touch, and understand existing states and conditions within a hardware and software environments — and, of course, that includes heterogeneous environments. So the technologies we use can be leveraged across almost anything that runs on an IP-based infrastructure. We have the capability to reach out into heterogeneous environments, and we’re doing so today via our managed services, offerings.
IC: How does this address customer needs?
Berg: This does two things for our customers. One, it significantly lowers costs because we can leverage the network to do remote monitoring and management. Second, when we use engineering practices to look at environments and treat things in a similar way, we can drive greater consistency. And consistency drives efficiency. So if we discover deficiencies within a given infrastructure, we can rapidly fix them by leveraging the network. In many cases, the fix can happen before a problem is even discovered by the customer.
IC: What has the acquisition of SevenSpace brought to Sun’s remote management and monitoring capabilities?
Berg: Sun has been doing remote monitoring, managed operations, and managed services at the enterprise level for some time. With the acquisition of SevenSpace we’ve added the capability to do this much more effectively for our small- to mid-sized customers as well as our enterprise customers. Plus, the acquisition of SevenSpace significantly enhances our capability to work within heterogeneous environments.
Several years ago, Sun changed its managed services strategy so that we now have capabilities to manage heterogeneous environments and remain agnostic as far as the specific technology that a customer may use. As long as the technology is network-based — and what isn’t these days? — we have the capabilities to provide services to those customers. Since few data center or IT environments are entirely Sun product-based, we have the capability to delivery services and the related value to any customer regardless of the products used and across their entire enterprise.
IC: Can you give an example of when Sun Services has been able to help a customer manage a heterogeneous environment?
Berg: In one case, we were monitoring and managing a Microsoft Exchange mail and messaging cluster for a customer, which is very much a non-traditional Sun environment. This customer was seeing a fault about once a month, but everything seemed to be normal from the data streams we were monitoring. Then we started looking at correlations and interactions of the telemetry data over time, and we found some interesting information. The method we used in this case was Holt Winters forecasting, which is a mechanism for performing time series-based forecasting which can predict future observations via trend analysis and cyclical coefficients. Using that technique, we could actually predict when the environment would crash.
We called the customer and said: “Look, we don’t know what the problem is, but we can identify when it is going to happen again.” Needless to say, they didn’t believe us. Sure enough, about a week later, it crashed, just as we predicted. So, they called us back and said: OK, keep that from happening again. As an interim step, when we saw those conditions happening again, we were able to restart the machines before the crash instead of having to recover the system afterwards. Ultimately, we were able to work with Microsoft to identify the core problem and get it fixed.
IC: What distinguishes Sun remote managing and monitoring from the competition?
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Berg: Pretty much everyone has the capability to leverage the network in ways to reach out to an environment. Sun is bringing the R&D innovation that takes place in our hardware and software groups to the services arena, so that we can begin troubleshooting and diagnosing on a proactive basis. We spend a lot of time looking at the telemetry that comes back from customer environments and using that to build knowledge and operational models. The idea is to identify a set of conditions and events that trigger (or have the potential to trigger) an unwanted outcome. Then, we can begin to build the knowledge base and event model to proactively keep the unwanted event from happening again.
By instituting a learning system, when we see new situations, we can learn from them, and then we can look for similar situations to prevent the problems from happening again. Remote management should be more than just reacting remotely; it should involve being proactive and discovering issues before systems break. By contrast, our competitors wait for things to break and then try to automatically patch or fix the issue.
IC: Specifically, how do you build that proactiveness?
Berg: In some cases we’re doing that through very high-end statistical techniques, as well as technologies that are somewhat of a “special sauce.” I can’t go into too much detail. But we’re applying some of our best engineering to look at customer issues differently and proactively. And we have services today that are specifically tuned for proactive resolution, such as Sun Preventative Services. These services are designed to collect data, understand environments, comprehend the associated risks, and mitigate those risks just like you would with a financial portfolio.
IC: Haven’t we heard that before, connecting and getting information from customers?
Berg: Yeah, and that’s a good point. We have been working on telemetry-based services for some time now. We have learned a lot in working with our customers and improving the value they receive. We now have a connection capability that is non-intrusive, secure, and flexible that allows us to receive telemetry and to deliver significant value back to our customers. These days, as soon as a customer plugs in a machine or turns on software, it has the capability to connect to us. Customers can opt out, but the advantage of connecting to us is that we can provide value back to the customer. For example, using the telemetry we can immediately recommend security patches to deploy or provide information about operating system tweaks that would improve system performance. And if the customer permits us, we can reach out over the network and perform those tasks for them.
IC: What advantages might customers expect if they connect to Sun? Can you give us some examples of what they get?
Berg: It opens a new channel for service capabilities. When Sun knows more about how our software and hardware are being used, we can provide higher value services back to our customers. We can begin to use real data to provide real service value. For example, customers that are using Sun Connection will be able to automate patch downloads and patching within their environments. They will be able to automate security services. They will be able to take advantage of our best practices and knowledge. And there are many other benefits.
The point is that customers that use Sun Connection will be able to take advantage of a continuous stream of new intellectual property from Sun (software, knowledge, tips, tricks, and more) to create real differentiation for them. That’s just one example of how Sun is delivering IT as a service.
Article Reference: http://www.sun.com/emrkt/innercircle/newsletter/0106cto.html
